Investors come calling at 1871

The startup hub inside the Merchandise Mart, 1871, is off to a fast start.

A half-dozen companies have landed $11.6 million in funding since 1871 opened seven months ago, attracting individual entrepreneurs with little more than an idea and more-established startups with products and paying customers.

The most recent tenant to get funded was online parking-reservation service SpotHero Inc., which participated in Excelerate Labs, an accelerator that's also housed in 1871. It raised $2.5 million last week.

Incubators are growing in popularity. Catapult, another co-working space downtown, says its member companies have raised $8 million this year. Another Chicago incubator, TechNexus, says companies there have raised $8 million this year.

Run by the Chicagoland Entrepreneurial Center, 1871 is a place where individual entrepreneurs and small startups rent space on a monthly basis for $125 to $400. The 50,000-square-foot space on the Merchandise Mart's 12th floor is home to more than 200 startups, says Kevin Willer, CEO of the not-for-profit entrepreneurial center.

“I was, frankly, a little skeptical when people told me about it, the idea all the cool kids are going here,” says Erik Severinghaus, CEO of Simple Relevance, an e-mail marketing company at 1871 that recently raised about $400,000. “But my opinion changed. I was a little worried about the distraction factor. People are so focused on their own businesses, it's not a problem. When somebody gets (funded), you give them a high-five in the hallway and get back to it.”

J.B. Pritzker, partner of Chicago-based venture capital firm New World Ventures, helped organize the effort. Other partners include several of the city's venture investors, accelerators and universities. The state of Illinois invested $2.3 million in the facility.

“The state's investment in this cutting-edge center is already paying dividends by creating jobs, drawing top talent from around the country and strengthening Illinois' position as a global leader for tech innovation,” Gov. Pat Quinn said in a statement.

Other companies receiving funds include Food Genius, which analyzes restaurant menu data and has moved out of 1871 to a new space ($1.2 million); MarkITx, which facilitates deals between buyers and sellers of used IT hardware ($1.1 million); and CityScan, which uses map data to show changes in billboards, awnings and other objects on the cityscape ($1.2 million).

Companies that got funding are on pace to add 29 jobs since May.

The pace of investment “is proof that Chicago is a hotbed for entrepreneurialism and technology startups,” Mayor Rahm Emanuel said in a statement. “More importantly, the jobs that these companies are creating will have a dramatic impact on Chicago's economic landscape for years and years to come.”